George Pascoe-Watson: Tory anti-business outbursts have left Number 10 gasping for breath

Written by George Pascoe-Watson on 29 June 2018 in Opinion

Opinion

The PM had to intervene after Boris Johnson misspoke - and then Jeremy Hunt piled in.

-- THE INSIDER -

Theresa May is the first holder of the keys to 10 Downing Street who has not been Leader of the Opposition or held an economic portfolio.

Yes, she began her professional career at the Bank of England. She’s no economic illiterate. Far from it. But her route to the top explains a lot when it comes to examining her relationship with the corporate world.

She doesn’t come to the office of Prime Minister with a contacts book crammed full of the great and good of global – or even British – boardrooms. She’s not been on first name terms with industrialists, advisers, exporters, makers, entrepreneurs and the like.

Mrs May and her husband Philip have a small social network of City financiers. But unlike her predecessors, the Premier is not closely tied to the corporate world. This critical relationship matters. Especially in a week where the Foreign and Health Secretaries have taken open potshots at the wealth-generators.

Many utterly unthinkables have happened in politics in recent years. But ask yourself this: could you ever imagine a Conservative government saying “fuck business”?

Of course, the Foreign Secretary made his comments behind closed doors. He hadn’t intended for them to emerge in public. Nonetheless. He said what he said.

Jeremy Hunt’s decision to effectively support Boris Johnson’s assertion caught many in Number 10 gasping for breath. The Prime Minister had no choice but to intervene. She couldn’t have been clearer as she drew a line under the unfolding furore and backed business.

A year ago, she would have struggled to be heard on this issue. Mrs May started off on a bad foot with most business leaders before she even became Prime Minister with an ill-judged stump speech on the leadership campaign. Her perceived assault on profiteering capitalists did her no favours with an industrial class struggling to hit growth and profit targets. And that was before the confusion and uncertainty of Brexit.

But examine the way things are today. Mrs May has had many private messages of support from business leaders she has now met – sympathetic to the objective she is trying to meet. They recognise in her a pragmatist who has to deal with the real world.

The CBI have condemned politicians for focusing on ideology rather than economics. But Mrs May couldn’t be clearer: political reality means Brexit is an ideology, like it or not. That’s the real world. To many in her own party, to many voters, the price of Brexit is worth paying for the long-term competitive and sovereignty advantages that leaving the EU will bring.

The Premier has not been shy in making this case in private to business folk. Mrs May’s business unit – run by the very able Jimmy McLoughlin – has stepped up engagement with the corporate world in the last 12 months. A new Business Advisory Council meets every quarter – advising the PM, the Chancellor, Liam Fox at International Trade, David Davis at DExEU and BEIS’s Greg Clark.

It is working well. It boasts a string of the new wave of industrial leaders. People like Sacha Romanovitch, the refreshingly candid first female CEO of accountancy giant Grant Thornton.

Mrs May is not alone. Be surprised, perhaps, to hear that she and the Chancellor Philip Hammond are at one on many more issues than you’d expect. The question of public spending is one that is driving high emotion around the Cabinet table. Its effects will be felt not only by voters, but by businesses.

The Chancellor and the PM are both gripped by one crystal clear point. Certainty and confidence amongst the business community will lead to stronger economic growth predictions. Those predictions will give the Treasury more headroom to increase budgets for the critical issues of the day demanded by voters, especially those looking for a reason to vote Conservative. And that means ensuring Brexit’s settlement gives the corporate world clarity, as early as possible.

You can argue what the specific details of that deal look like. Many around the Cabinet table are doing just that. Many businesses are rightly demanding the details. They will come. Expect in the next week or so details of how Britain will propose continued Customs Union ties for goods, but not for services.

Be prepared for a seemingly never-ending transition period for certain sectors. There’ll be accommodations for regulatory bodies. And the hard-liners who are comfortable with a hard Brexit will have to calculate whether bringing down the government at this time is in their best interests.

But Mr Hammond and Mrs May are fighting for a deal which gives the boardrooms of Britain and abroad – for foreign investment is critical – the stability needed to spend money.

George Pascoe-Watson is a partner at Portland Communications and former political editor at The Sun.